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New Penalties for Failing to Timely File W3 and W2 Forms

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The 2016 W3 and W2 forms are due to employees and the government by January 31, 2017. Failure to file a correct form W2 by the due date without showing reasonable cause, may result in penalties as provided under IRS Section 6721.  The penalty applies if you:

 

-Fail to file timely.

-Fail to include all information required to be shown on Form W2,

-Include incorrect information on Form W2

-File on paper forms when you are required to e-file

-Report an incorrect TIN

-Fail to report a TIN

-Fail to file paper Forms W2 that are machine readable.

The amount of penalty is based on when you file the correct Form W2.  The penalty amounts below apply for tax years beginning in 2016.  The penalty is:

 

-$50 per Form W2 if you correctly file withing 30 days of the due date (February 28 if the due date is January 31); the maximum penalty is $532,000 per year ($186,000 for small businesses)

-$100 per Form W2 if you correctly file more than 30 days after the due date but by August 1; the maximum penalty is $1,596,500 per year ($532,000 for small businesses)

-$260 per Form W2 if you file after August 1, do not file corrections, or do not file required Forms W2; the maximum penalty is $3,193,000 per year ($1,064,000 for small businesses)

 

For further information, including exceptions to the penalty, please go to the General Instructions for Forms W2 and W3 at irs.gov.

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